A bigger deposit also shows lenders you're a good saver and able to manage your finances. This can increase your chances of getting approved for a home loan.

Loan to value ratio

The bigger your deposit, the lower your loan to value ratio (LVR). Your LVR is the amount of the loan divided by the purchase price (or appraised value) of the property. For example, if you're buying a $600,000 house and you have a $450,000 loan, your LVR would be 75%.

The lower your LVR, the less likely you'll have to pay for LMI. You're also more likely to get approval for a loan.

Lenders mortgage insurance

If your LVR is above 80%, you usually have to pay for LMI. This insurance protects the lender if you can't make the loan repayments and the lender can't recover the loan balance. LMI protects the lender, not you or a guarantor.

You're charged a one-off fee to cover the cost of LMI. You can pay this fee on settlement or add it to the loan. If you add the LMI fee to your loan, interest will be charged when you repay it.

The average LMI fee is $6,200. But it can be a lot more if you have a low LVR. For more on LMI, see the Understand Insurance website's frequently asked questions on LMI.

First Home Super Saver Scheme

The First Home Super Saver Scheme (FHSSS) lets first home buyers save a deposit through their super. You can make up to $15,000 of voluntary super contributions a year that can be withdrawn to buy your first home.

Across all years, the maximum amount you can save in super for the scheme is $30,000 of personal contributions plus earnings.

Use a high-interest savings account

Put your deposit savings into a high-interest savings account or term deposit. You'll earn a lot more interest compared to a transaction account.

Automate your savings

A great way to boost your savings is to transfer money to a savings account as soon as you're paid. Ask your work to send part of your pay directly to a savings account or set up an automatic transfer from the account your wage is paid into.

Automatic transfers let you 'set and forget'. You can grow your savings without having to worry about transferring money each pay.

Consider investing

If you plan to buy your house in a few years, you could consider investing. If you're comfortable with the risk, investing in shares or a managed fund can help grow your savings.